Monday, December 12, 2011

Sold GDX Puts

Today with the DOW down 168 points to just over 12000 and GDX, the gold miners ETF, down to~ $55.50 I entered into the following transaction in a taxable account:

STO 2 GDX Jan 21 2012 52 Puts @ 1.47                    +282.45

GDX has bounced off $52.50 for a year now. We are bullish precious metals and will be happy to own GDX at 50 and change. This might not be the absolute bottom but I anticipate that GDX, like the South, will rise again.

If the puts expire worthless this is a 2.7% return for 40 days or 24.7% annual. For those that give merit to return on margin (ROM) the return is a whopping 21.26% or 194% annual.

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